<article><p class="lead">Brazil's exports of iron ore in September fell by 20pc on the year to reach 27.14mn t, following on from a proportionate decline in August, trade data show.</p><p>The drop in September and August exports comes after exports in <a href="https://direct.argusmedia.com/newsandanalysis/article/1954009">July reached their highest level this year</a>, at 33.97mn t, and since the January accident at Vale's Feijao dam in Minas Gerais.</p><p>Exports from January-September totalled 251.8mn t, down by 11.8pc year on year.</p><p>China remained the largest recipient of Brazilian iron ore, receiving 19.39mn t in September, not far off from the 19.64mn t shipped last September. But shipments to other destinations accounted for the decline in overall exports.</p><p>Exports to other north Asian destinations, South Korea and Japan continued to decline last month. Exports to Japan totalled 988,750t in September, down by 34.4pc compared with the same month in 2018, while exports to South Korea reached 343,869t, down by 61pc on the year. In the summer, the earlier-than-expected return of part of Vale's production capacity meant that mills in Asia-Pacific and Europe reported having to turn down cargoes being offered by the company. Since supplies were disrupted in March, several of these mills secured alternative supplies to meet their requirements, leaving little room for additional cargoes amid strained steel market conditions.</p><p>Malaysia was the second-largest destination of Brazilian iron ore exports in September. Its receipts totalled 1.57mn t, down by 39.3pc on the year after volumes had increased steadily for the first eight months of this year despite the supply disruptions. Most shipments would have been directed to Vale's iron ore blending plant in Teluk Rubiah.</p><p>Exports to Europe in September totalled 1.85mn, down by 20.5pc compared with the same month last year, reflecting the slowdown in raw material demand this year as mills across the region cut production capacity.</p><h3>Little worry of supply tightness</h3><p class="lead">The decline in iron ore exports from Brazil is not expected to worry mills, with UK-Australian resources firm BHP seeing <a href="https://direct.argusmedia.com/newsandanalysis/article/1987802">downside risk for iron ore prices</a> despite its projection that it will take years for Brazilian iron ore exports to return to normal.</p><p>In addition to slowed steel production growth, BHP also expects higher scrap use in China to put pressure on iron ore and coking coal demand.</p><p>Vale <a href="https://direct.argusmedia.com/newsandanalysis/article/1989537">plans to restart 60mn t/yr of iron ore capacity by 2021</a> in Minas Gerais province. Operations at its Minas Itabirito and Mariana complexes are scheduled to resume next year, while the Vargem Grande complex is likely to restart in two years.</p></article>